NS Health not following provincial rules for some contract procurements: audit

An audit is critical of Nova Scotia Health’s health contract procurement policy.

Nova Scotia Health did not follow provincial rules for certain contract procurements, according to a new report from the auditor general.

The audit looked at six health contracts with Nova Scotia Health and found the organization inappropriately used the alternative procurement policy instead of the provincial policy.

As a government entity, Nova Scotia Health must follow the Public Procurement Act and the Sustainable Procurement Policy, which call for procurements of goods, services and construction that encourage competition, promote sustainable procurement and result in the best value.

They can only use the alternative method in emergencies, to maintain compatibility with existing products or if only one vendor can provide the required good or service.

“Our audit testing reveals that weak rationale was used to justify the use of alternative procurement for four of the six vendors examined,” the audit reads. “In some cases, the scope and value of the work was later significantly expanded.

“While we acknowledge NSH’s need to act quickly to address the challenges facing the Province’s healthcare system, expediency should not take priority over appropriate due diligence, nor does it justify non-compliance with procurement policy. The lack of competitive bidding makes it challenging to objectively determine the most qualified vendor and most reasonable cost.”

The audit noted Nova Scotia Health spent $3.7 billion on alternative procurements between 2020 and 2025. They spent $3 billion in the 2024-2025 fiscal year alone.

The six vendors that were the focus of the audit were contracted to build a transitional care facility, provide cancer care equipment, develop a chat tool for YourHealthNS, provide virtual care, provide related services to the YourHealthNS app and to integrate internationally educated nurses.

The audit found Nova Scotia Health cited absence of competition in five of the six alternative procurements.

“Alternative procurement reduces competition and public transparency and potentially discriminates against vendors while increasing the government’s reliance on a single vendor,” said Auditor General Kim Adair in a news release.

The audit made 13 recommendations and Nova Scotia Health has agreed to implement them all. They include:

• provide clear justification for using the alternative procurement policy
• develop strategies to reduce reliance on vendors who are continually hired through alternative procurement
• require conflict of interest declarations for Nova Scotia Health staff and vendors involved in alternative procurements
• sign contracts with all vendors before work begins

In a separate news release, Nova Scotia Health said the auditor general’s report provides “useful recommendations” to strengthen procurement, but claimed the report did not examine value for money or if the six contracts delivered needed health system outcomes.

“We feel the improvements Nova Scotians have seen as a result of these projects demonstrate the effectiveness of our work with these vendors,” the release reads. “Nova Scotia Health believes that when required, alternative procurement enables us to deliver better value, faster service and stronger results for Nova Scotians, while maintaining the principles of transparency and fairness that are the foundation of public procurement.”

When asked about the amount of spending done through sole-sourced contracts, Premier Tim Houston said he’s more concerned about progress than process.

“Alternative procurement is an actual process,” said Houston. “We’re not the first government to use it for sure but we might be the first government to feel the urgency to deliver for Nova Scotians on health care.”

Opposition leader Claudia Chender told reporters the Houston government has ensure Nova Scotians are getting the best value for their tax dollars.

“This is a government that likes to do business in the dark,” said Chender. “And this government is just flouting every rule and every norm around how it spends and how it deals with the public purse and I think Nova Scotians should be very concerned.”

Liberal MLA Derek Mombourquette isn’t sure the government can back up the fact they are getting the best return when alternative procurement or sole-sourced contracts are used.

“That’s why going out to tender is so important,” said Mombourquette. “That’s when you get the best companies stepping forward and providing their services and that’s when you get a chance to evaluate the cost.”

With files from CTV News Atlantic’s Jesse Thomas

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